Crypto currency is now firmly established, having first arisen in 2009 when it rapidly gained traction. Its decentralised status was appealing to many investors. However, there was a significant divide as to how it was regarded. Many sources regarded as the future of money whilst others were considerably more cautious.
The volatility of crypto currency became self-evident but despite this, it still remained popular. The aspects that made crypto currency so attractive to investors, its decentralisation, online presence and its encrypted standing also made it a perfect vehicle for fraud. As the economic crisis deepened many novice investors were tempted to invest in cryptocurrency and discovered that they had been defrauded.
The recent attempt by the Financial Conduct Authority (FCA) by the introduction of new rules to compel the crypto investment platforms to establish ethical behaviours towards crypto investors go some way to protecting novice investors but lack the robustness required to ensure that fraudsters will be driven out of the market. The UK government’s stated aim to become the leading regime for crypto asset trading may be a consideration in the relatively lightweight rules.
However, as crypto fraud has spiralled across the world there is a strong objective to implement vigorous regulation and compel the compliance with existing regulations, such as anti-money laundering and introduce further measures to protect investors. The Financial Action Task Force (FATF) https://www.fatf-gafi.org/en/home.html is a global money laundering and terrorist financing watchdog, with a stated purpose of depriving criminals of illicit assets gained through the medium of fraud. It is vital that all National Authorities work together to develop effective systems to trace, seize and confiscate stolen funds and assets, and to return them. Giambrone & Partners point out that 200 jurisdictions have are committed to executing the FATF standards and recommendations in relation to anti-money laundering.
The commitment to protecting investors and introducing strenuous regulatory rules is heightened by the fall of FTX now followed by the largest crypto exchange Binance and the revelation that the CEO Changpeng Zhao has admitted to anti-money laundering, unlicensed money transmitting and sanctions violations and faces a custodial prison sentence. However, the admission follows negotiation with a number of US government agencies and is part of a settlement that has been reached involving the US Justice Department, Treasury’s Financial Crimes Enforcement Network (FinCEN), the Office of Foreign Asset Controls (OFAC) and the Commodity Futures Trading Commission.
Joanna Bailey commented “Giambrone & Partners’ banking and financial fraud team’s successes in persuading the court of England & Wales to allow a worldwide freezing order, minted as a non-fungible token (NFT), to be served though the blockchain to persons unknown in the case D’Aloia -v-. (1) Persons Unknown (2) Binance Holdings Limited and others, the first in Europe has been a turning point in the legal pursuit of crypto fraudsters and offers hope to the victims of crypto investment fraud.” Joanna further suggested “this achievement has been further bolstered by a further decision by the England & Wales court to grant summary judgment in a crypto fraud case where both the victim and the perpetrators are based abroad.”
Giambrone & Partners banking and financial fraud litigation department are leading lawyers that have swayed the courts to take revolutionary steps that have an immense impact on recovering of fraud victims lost funds worldwide. Under the leadership of Joanna Bailey, strategies were and continue to be developed to combat the attempts by the wrongdoers to avoid detection and place the stolen assets beyond recovery.
Binance’s exponential growth to be world’s largest crypto exchange was facilitated by its misconduct in processing illicit transactions by its customers and “laundering proceeds of darknet market transactions, hacks, ransomware and scams.” Giambrone & Partners continue to develop cutting-edge strategies to combat the growing level of crypto fraud.